Equity partner profits drop 28 percent at Pepper Hamilton; strong 2015 skewed numbers, firm says
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Pepper Hamilton says it had a strong year in 2015, buffered by some contingency fee cases, and that is one reason why it is showing a decline in profits for 2016.
Revenue at the firm dropped 10.6 percent to $347.5 million in 2016, the same year in which the firm and Reed Smith called off merger talks, the Legal Intelligencer (sub. req.) reports.
Profits per equity partner last year dropped 28.8 percent to $730,000, while average compensation for all partners dropped 23.3 percent to $610,000.
In interviews with the Intelligencer, firm leaders cited the firm’s strong year in 2015 and a temporary drop in the firm’s health effects practice as reasons for the decline. The health effects practice includes pharmaceutical and medical device litigation, and it will become part of a multidisciplinary health sciences department.
“The market and the world should not be surprised that Pepper Hamilton, coming off its best year, that there was some drop-off,” said managing partner Thomas Cole.
Unnamed sources told the Intelligencer that lawyer departures also might have affected the firm’s financial performance. The firm’s head count dropped 1.8 percent last year, while the number of equity partners dropped 4.3 percent. The number of nonequity partners, however, jumped 10.2 percent.
Meanwhile, some additional partners are “eyeing the exits,” according to the Intelligencer, which based its statement on unnamed sources.
